Thursday, June 28, 2012

South Africa and the 'Currency Wars'

South Africa and the 'Currency Wars':

'via Blog this'

Corruption And Cheap Nigerian Crude Prices

Oil scam exposes how small firms sell at discounts

Emma Farge Geneva
Little-known companies claiming to have privileged access to prized sweet crude oil from Nigeria are offering to sell it at such deep discounts that traders say the deals are too good to be genuine.
Documents seen by Reuters show spot cargoes of several hundred thousand barrels of crude can be picked up at discounts of up to $10 million (R84m). But the documents are suspiciously flawed, suggesting that the financial scams for which Nigeria is notorious have spread to its oil sector.
State oil company Nigerian National Petroleum Corporation (NNPC) has placed a “scam alert” on its website warning of “unsavoury characters purporting to be bona-fide staff of the NNPC or contractors to NNPC or purchasers of Nigerian crude oil or contractors to the Nigerian government”.
The sellers include one British-registered company purporting to be near the top of a sales chain in which oil cargoes can change hands up to half a dozen times before being refined.
Two of the firms said they were able to sell oil cheaply because of special access to NNPC contracts.
The documents point to the difficulty faced by Nigerian President Goodluck Jonathan in making reforms when there is considerable doubt over who is responsible for selling the oil.
Nigeria has pledged to take measures to fight corruption in the oil sector after a hike in state-subsidised petrol prices sparked mass protests in January.
One recent step has been the creation of higher barriers to entry for participation in NNPC’s 2012/13 term allocations. The results have not appeared since the initial tender document was released in March. On Tuesday Jonathan sacked the managing director of the NNPC and three other senior directors.
“To further strengthen the ongoing reforms… and in furtherance of efforts to achieve greater transparency and accountability… President Jonathan has approved the recomposition of the executive management team of the NNPC,” an official said.
Governance adviser at Revenue Watch Institute Alexandra Gillies said the proliferation of middlemen involved in selling Nigeria’s oil since Jonathan’s election last year had resulted in considerable uncertainty over ownership.
“If NNPC only issued term contracts to companies with the capacity to lift crude, then nobody would be able to pose as a company flipping (reselling) a cargo.
“The confusion is a symptom of Nigeria’s sub-optimal system for selling its oil,” she said.
A report that government-funded watchdog the Nigeria Extractive Industries Transparency Initiative sent to the authorities in January showed billions of dollars missing from oil revenues.
Five written offers reviewed by Reuters show a close resemblance to official paperwork circulated among traders, including documents attributed to NNPC, stamps from terminal operators and shipping lists with vessels and loading dates.
They include arcane oil market jargon such as “laycan”, which refers to the timeframe for loading and “STS”, meaning ship-to-ship transfer of the cargo.
One shipping list showed a tanker called the “Elsa Craig” – a name close to an actual Panama-flagged crude oil tanker called the Ailsa Craig 1 – next to other cargoes booked by western oil majors such as Chevron.
“They are full of imagination,” said a west African oil trader, commenting on the document.
A second oil trader with a London-based oil firm suspected that some of these offers were attempts to resell the oil siphoned off by thieves in the Niger Delta, since the majority of offers were for the local grade Bonny Light.
“A lot of this oil on the side may be bunkered (stolen) and does go to people in the Delta to sell. It’s a side business and I think some buyers are doing good business there,” he said.
A third oil trader said he had considered buying a cargo from an Abuja-based company called Sunny Industrial Lubricant but rejected it only after a member of the compliance team noticed a flaw in the NNPC logo.
NNPC’s logo – a green, red and yellow wagon wheel – has 20 spokes, compared with 22 on this document. “We discovered that the logo was not fully accurate. It’s difficult to distinguish and it’s a big risk,” said the oil trader who asked not to be named.
When contacted for comment, the firm’s chief executive, Sunny Eze, said he was able to gain access to oil produced in excess of Nigeria’s official Opec production target, known as “off-Opec” crude.
Another firm, the UK-registered Current Energy, said in an offer letter that it was reselling 5 million barrels a month of the benchmark Bonny Light grade obtained from an NNPC contract holder at $6 a barrel below the market price.
This amounts to a saving of $6m per cargo, about 7 percent on a cargo that would currently cost about $90m.
Reuters shipping data showed that 4 million to 8 million barrels of this grade, sourced from the Niger Delta, have been available for export monthly this year.
When contacted for comment company director Akin Aboaba said he was reselling oil obtained from an NNPC contract holder who had received the oil to compensate for oil spills from regional pipelines.
Nigeria’s oil is sold by equity holders including oil majors Total and Royal Dutch Shell, which have a stake in production and via term contracts handed mostly to oil trading companies. The large number of companies involved in selling oil via term contracts means it can be tough for even experienced traders to tell the difference between real and fake offers.
Industry sources said the number of companies selling Nigeria’s oil increased dramatically after Jonathan’s election as part of a strategy to broaden local participation in the country’s oil sector.
But critics point to this as an example of the cronyism that is helping to buttress support for Nigeria’s political elite.
“It will be interesting to see whether the issuing of the latest crude tender to include Nigerian companies is a return to the political patronage of the past dressed up as increasing Nigerian content,” said an oil industry consulting source in Nigeria.
Under every new regime, military or civilian, the list of those authorised to sell Nigerian crude is usually torn up and a new one issued to include friends of the new government.
Last year’s allocation list showed a considerable increase in recipients from 2010 and had more than 40 names ranging from top commodities trading houses such as Glencore and Trafigura to little-known Nigerian firms including Masters E and Delaney.
Term contracts allocated to oil companies without the know-how or logistics to handle multimillion-dollar oil shipments were often resold or “flipped” to other traders, industry sources said, making it hard to verify who really had the country’s oil to sell. – Reuters

Monday, June 18, 2012

Chris Kilowan And The Bribery Allegations Against MTN In Iran

I just spent quite a bit of time dissecting the Reuters report on the deposition given by former MTN executive Chris Kelowan.
He has made a good case that MTN and even the South African government conspired to defeat sanctions to help Iran. As a matter of interest boh General Electric and Halliburton were caught a couple of years ago by US authorities having ongoing offices and substantial investments and sales in Iran. How did the US authorities react?
1) Nobody was arrested for any violation of criminal laws.
2) No company or individual was cited for a civil fine or a penalty.
3) No US government contracts were taken rom these major US corporations.
4) All that happened was that the US Justice Department ordered the two big US companies to as follows; "To wind up their operations in Iran within 5 years."
Some 20 years ago I was active in the international trade sector in South Africa. I am pleased to report that when a South African company is working on a deal in another country, the South African government "rolls up its sleeves" and works like hell to get the company the deal it is seeking. This is one of the few areas of government where the taxpayer "truly gets his/her money's worth!" I never saw a case where bribery or corruption to obtain a deal was used or even considered. I suspect that the situation is the same today.
There was no real substantial evidence of MTN actually paying bribes to Iranian officials. Perhaps some of the Iranian companies did pay these bribes. That is an internal matter for the Iranian authorities. I suspect that the penalty for bribing public officials in Iran is hanging. By the way, hangings in Iran are carried out in a most barbaric manner. The condemned person has a metal rope put around their neck. A crane then lifts the metal rope. As a further matter of interest Iran is the number one country in the world in per capital executions per 100,000 population. So Iranians use the death penalty quite often.
One has to ask how much money Turkcell has paid and promised to Mr. Kilowan.
The bottomline is this case is not good. If I had some extra cash right now I'd be buying MTN shares.

The Turkcell Bribery Complaint Against MTN

My dear readers I used to work in international trade in South Africa. To the credit of the South African government then and now, if a South African company was working to make a deal the local South African embassy would be there at every level helping out. But I never saw any bribery or corruption to get a deal made.

Below you will see allegations of the South African governmnet helping Iran to get around some US sanctions. I believe that part of the story. South Africa is always a non-aligned country and certainly not a puppet of the USA. While such acts are not a source of pride they do not go to the level of a crime. Even here in the USA major companies like General Electric and Halliburton were caught trading with Iran in contravention of the sanctions. No criminal or civil penalties were levied. In these cases the companies were" given five years to get out of Iran."

I wonder how much money Turkcell paid to this ex-MTN employee to get him to make these allegations?

Ex-MTN exec leads Turkcell testimony

BR MTN 2877
Independent Newspaper
The MTN head office in Fairland near Cresta.picture: Timothy Bernard.

For MTN it represented a unique chance to seize what its chief executive called “one of the most significant ‘virgin’ mobile opportunities in the world”. But the location, he added in a confidential memo, was “no normal country”.
The country was Iran. Now, seven years after MTN and its local partners won a lucrative licence to launch a new Iranian cellphone carrier, the deal is swirling in controversy and raising embarrassing questions for South Africa at a time when the West is trying to contain Iran’s nuclear ambitions.
Turkcell, an Istanbul-based rival, filed a federal lawsuit in Washington in March alleging that MTN bribed its way into Iran and stole the licence from it. It seeks at least $4.2 billion (R34.9bn) in damages.
The Hawks are investigating. MTN has denied the allegations and called Turkcell’s demands “extortionate”.
MTN has appointed a prominent judge in London to conduct an internal probe of the allegations surrounding what has become one of its most valuable holdings. Last year MTN made 9 percent of its annual revenue from its Iran venture, the company reported.
The core of the Turkcell case is the sworn testimony of Chris Kilowan, a former MTN executive who guided the company’s bid to win the Iranian licence and has emerged as the key witness. He has given Turkcell’s attorneys 7 000 pages of internal MTN documents related to “Project Snooker” – MTN’s code name for its effort.
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Chris Kilowan, a former executive of MTN.
Independent Newspapers
“We said we are going to snooker Turkcell,” Kilowan testified.
MTN, now Africa’s largest cellphone carrier, has called Kilowan “a disgruntled former employee” and has termed his allegations “outlandish”.
During three days of sworn testimony in Washington that concluded on May 2, Kilowan presented an extraordinary tale of a multinational company so intent on winning a contract, it was willing to help Tehran get military hardware, sway South Africa’s votes before the UN’s International Atomic Energy Agency (IAEA) and pay bribes, sometimes in the guise of consulting fees. MTN has yet to give evidence in the case, which is continuing and may go on for years.
Kilowan admitted fronting $200 000 of his own cash to reward South Africa’s then ambassador to Tehran, Yusuf Saloojee, for assisting MTN in Iran. Kilowan says it was MTN’s later refusal to pay him back that convinced him to cooperate with Turkcell. Saloojee, now South Africa’s ambassador to Oman, did not respond to requests for comment. Other South African officials denied Kilowan’s allegations.
Reuters has reviewed the entire transcript of Kilowan’s deposition, most of which has not been made public, as well as numerous other exclusive documents.
The dramatic testimony comes at a time when the Western world is trying to contain Iran with forceful sanctions intended to deter its nuclear development programme, which Iran maintains is peaceful. After choking off Iran’s banks from the international monetary system, the EU plans to implement an embargo on Iranian oil and a ban on insuring oil cargoes on July 1.
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MTN chief executive Sifiso Dabengwa. Photo: Leon Nicholas.
Independent Newspapers
The sanctions have not been leak-proof. Reuters has documented how Iranian telecoms firms – including the MTN joint venture – have managed to obtain embargoed US computer equipment through a network of Chinese, Middle Eastern and Iranian firms.
The Turkcell-MTN case offers further evidence that there are always companies willing to do business with a country even when it becomes an international pariah.
That goes for some governments as well. The ANC has long maintained close ties with Tehran, which during the 1980s supported the anti-apartheid underground and imposed a trade boycott on the white-ruled government.
In an interview with Reuters last month, Gwede Mantashe, the ANC’s secretary general, said he had “no problem at all” with South Africa “trading anything” with Iran today, including weapons.
Kilowan’s story begins in 2004 when MTN sent him to Iran. MTN had seemingly lost out to Turkcell for the licence to launch what would be the country’s second cellphone operator. He testified he began meeting with Iranian officials to determine what had gone wrong with MTN’s bid and lay the groundwork for competing for a licence to run a third carrier. At the time, Iran had just one cellphone operator, Telecommunication of Iran.
Kilowan said he learned from ambassador Saloojee, who had recently arrived in Tehran, that MTN should not give up on pursuing the second licence even though it appeared Turkcell had won. It also soon became clear to Kilowan that if MTN was going to undo Turkcell’s victory, it would have to meet a long and growing list of onerous Iranian demands.
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Former MTN chief Phuthuma Nhleko. Photo: Simphiwe Mbokazi.
Independent Newspapers
The bidding rules required foreign companies to partner with Iranian entities. Turkcell’s partners had included Sairan, which Kilowan testified was an arms manufacturer owned by Iran’s Ministry of Defence, and Bonyad Mostazafan, a foundation he said reported directly to Iran’s supreme leader.
He portrays Sairan and Mostazafan, which eventually teamed up with MTN, as manipulative and untrustworthy, and later wrote in an internal memo that MTN’s desire for the licence “should not blind us to the clear reality that we are not negotiating with honest partners.” Officials at Sairan and Mostazafan could not be reached for comment, and Iranian diplomats in South Africa and New York did not respond to requests for comment.
Kilowan said he and two South African diplomats held an initial meeting around March 2004 with a Sairan official, who complained that South Africa had failed to deliver military radios Iran had purchased a year earlier. “You should push your government that they must sell these things to us,” Kilowan quoted the Sairan official as saying. “I said, ‘Okay, I will. I will talk to my people, and they will talk to the government.’”
MTN had longstanding connections to the South African government through the ANC, Kilowan testified. These ties are well documented: MTN was set up with government help in 1994 as one of the first black-owned companies after the end of apartheid. Many MTN officials, including chairman Cyril Ramaphosa, had been ANC activists during the Struggle.
A spokeswoman for Ramaphosa referred Reuters back to MTN, which in turn referred to his public statements on the matter. Ramaphosa announced in February that MTN had set up a special committee to investigate Turkcell’s claims, saying, “MTN has zero tolerance for corrupt and unethical business practices.”
Kilowan testified that during meetings, the Iranians – people at Sairan and other government officials – repeatedly raised two requirements: their need to acquire military hardware, including drone aircraft, and to win support for Tehran’s nuclear development plan. He said he and his then boss, Irene Charnley, an MTN director, concluded that “if we could somehow develop a strategy around these two issues”, MTN might win the second licence.
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Former SA ambassador Jusuf Saloojee.
Independent Newspapers
According to Kilowan, MTN set out to provide the Iranians access to high-level South African government officials. This included helping to arrange a visit to Iran by South Africa’s then defence minister, Mosiuoa Lekota, to meet his Iranian counterpart.
Lekota visited Iran in August 2004, accompanied by MTN director Charnley and its then chief executive, Phuthuma Nhleko, Kilowan testified. “It was specifically arranged so as to prove to the Iranians that MTN can deliver on the defence matters,” said Kilowan, who noted he was in South Africa at the time.
Nhleko, who left MTN last year, told Reuters: “It is really not for me to comment on the visits abroad of South African government ministers.”
Replying to questions, Charnley, who left her executive post at MTN in early 2007, said: “Turkcell’s allegations are entirely without substance. Neither I nor MTN were in a position to influence the policies or decisions of the South African or Iranian governments, and we did not do so.“
An Iranian news agency account of Lekota’s two-day visit reported that he told a news conference that Iran had a right to pursue peaceful use of nuclear energy. The Iranian defence minister, Ali Shamkhani, said the two sides had discussed expanding military, economic and political ties, and had signed an agreement to expand bilateral co-operation.
In an interview with Reuters, Lekota said he travelled to Iran “on official business” and was not working on behalf of MTN. “I have never had anything to do with the MTN licence,” he said. Asked the nature of the visit, he replied: “You are subjecting me to a cross-examination of issues that happened some time ago… I don’t have access to those documents now.”
Asked about the documents, Lindiwe Sisulu, until last week South Africa’s defence minister, said her office got none of Lekota’s records when he resigned in 2008. “I’m therefore not able to answer on his behalf what it is that he was doing” in Iran, she said.
According to Kilowan, Saloojee later showed him a wish list of arms Iran wanted to buy from South Africa. The list included radar systems, armoured personnel carriers, long-range cannons and the Rooivalk attack helicopter. Kilowan testified that Saloojee told him: “They want everything from the earth to the sea, and everything that is in the sea and everything that flies.”
Kilowan said Iranian officials also directly told him they wanted help in acquiring military equipment, including helicopters and drone aircraft. He said he and MTN director Charnley worked to contact South African defence contractors to help deliver to Iran what MTN executives code-named “the fish” – weaponry.
“We were not promising to facilitate the arm sales,” Kilowan testified. “We were promising to get them in front of the right people for these arm sales. And if there are any bottlenecks, we would talk to the minister, for example.”
Charnley said: “The first time I heard the phrase ‘the fish’ in this context was when my attorneys briefed me on the Turkcell allegations in 2012.” She denied trying to help Iran secure arms from South Africa.
To support Kilowan’s allegations, Turkcell’s lawyers have submitted what they say are internal MTN documents from his computers. The evidence includes an alleged fax from Charnley in November 2004 to the head of Sairan stating she was trying to set up a meeting about the helicopters between Denel and an Iranian helicopter company. The document says it was “signed on her behalf by Nkateko Nyoka”, another MTN executive.
Charnley disputed the fax’s authenticity. “I didn’t send any such fax, am not aware of any such fax having been sent, and I never asked anyone to send such a fax on my behalf,” she said. Nyoka, no longer with MTN, said he did not know anything about the document.
Turkcell’s documents also include an alleged fax to an Iranian official from Donald Ramfolo, then a Denel regional marketing manager, stating: “We at Denel feel honoured to have received your request for co-operation in the helicopter support field.”
In an interview, Ramfolo said Denel had proposed selling Iran “aviation technology”, including fibreglass technology for drones, but MTN was not involved and the South African government nixed the deal. “We were doing our own thing and MTN were doing their own thing and we didn’t mix,” he said. Ramfolo no longer works for Denel. A spokeswoman for Denel did not respond to requests for comment.
Turkcell’s evidence also includes an alleged signed agreement between MTN and its Iranian partners from September 2005 that states: “The co-operation between MTN and Iranian shareholders should be in the line of defensive, security and political co-operation. MTN shall fully support co-operation regarding the afore-mentioned issues in South Africa.”
Kilowan testified that the Iranians were insistent on that clause and that Nhleko signed the agreement. Kilowan said it meant “that we would continue to provide support to Sairan in particular around defence matters and we would continue to provide political support or get political support from the South African government for the Iranian government”.
Asked to comment, Nhleko said: “Neither the MTN Group nor I were in a position to influence or fetter the decisions and foreign policy of the South African government, and we did not do so.”
In the end, South Africa never delivered any arms.
Kilowan said the failure to deliver the arms resulted in continued friction between MTN and the Iranians.
MTN was pressed to deliver in other ways. On the nuclear front, Kilowan testified that MTN helped pay for a trip to South Africa around late 2004 by Iran’s then-chief nuclear negotiator, Hassan Rowhani, so he could meet with then-president Thabo Mbeki.
“We paid for the hotels in Cape Town. We paid for the dinners, everything. We bought presents for them. And we made sure that he got to see president Thabo Mbeki,” Kilowan testified. Rowhani could not be reached for comment.
Mbeki spokesman Mukoni Ratshitanga said: “We’re not going to be drawn into commenting on these allegations.”
According to Kilowan, MTN was promised the telecoms licence in November 2005. But when he arrived to pick it up, he said an Iranian official told him that it could not be issued until a vote later that week at the IAEA in Vienna. Members were considering whether to refer Iran to the UN Security Council for possible sanctions.
South Africa abstained. Several days later, MTN received the licence. Kilowan testified that although MTN could not claim credit for the abstention, “we essentially put a lot of pressure” on the government. The government has denied MTN played any role.
By the time MTN got the licence to launch MTN Irancell, it had made a series of concessions to its Iranian partners.
Although MTN owned 49 percent of the joint venture, it agreed to put up 100 percent of the licensing fee and capitalisation costs – e450 million (R4.7bn) in all. By Kilowan’s account, the Iranians tricked MTN into signing a document in Farsi that committed it to paying all its partners’ share. Neither MTN nor its partners have commented on this allegation.
Over the objection of MTN’s chief financial officer at the time, Rob Nisbet, MTN structured its additional contribution as a complex series of loans, Kilowan testified. Nisbet, who has since left MTN, declined to comment.
Kilowan said he objected to the loan arrangement. In a confidential October 2005 memo to MTN’s chief executive, which was reviewed by Reuters, Kilowan wrote: “They have no intention whatsoever to repay the money that they want us to advance them.”
He also wrote: “I have now arrived at the conclusion… that the primary reason they have shifted to MTN is because they have concluded that we are desperate enough for this licence that we will give anything.”
MTN’s financial statements show that the loans, originally supposed to be repaid by 2009, were renegotiated and extended. MTN recently reported that three of four loans were repaid last year, with the fourth extended until 2014.
Among Kilowan’s most serious allegations is that MTN paid a series of bribes, including to Javid Ghorbanoghli, an Iranian deputy foreign minister who had once served as Iran’s ambassador to South Africa. Kilowan also alleges that payments were made to Saloojee and six Iranian government employees he did not name.
Kilowan testified that in May 2005 Charnley told Ghorbanoghli: “We are now entering a very delicate phase. We would really appreciate all your assistance that you can give us. And, of course, when we get the licence we will be very happy to thank you in the appropriate way.”
Within months, Kilowan said, the Iranian diplomat began asking him about “compensation”. Kilowan said he and Charnley agreed to wait until after MTN got the licence.
After the licence was issued, Charnley suggested Saloojee should also be paid for assisting MTN, Kilowan testified.
Charnley denied this, stating: “I didn’t bribe anyone, I’m not aware of anyone having been bribed, and I wouldn’t have tolerated any bribery had I been aware of it.”
According to Kilowan, Ghorbanoghli grew agitated in 2006 over not having been paid. Kilowan said he and Charnley decided to pay him by awarding a consulting contract to an oil services company in Dubai owned by one of Ghorbanoghli’s friends.
Turkcell’s evidence includes a copy of an agreement signed by Kilowan on behalf of MTN International, a unit of MTN Group, to pay $400 000 to Aristo Oil International Services for “consulting services” related to MTN’s “entry into the Iranian mobile market”.
Ghorbanoghli could not be reached for comment. Aristo’s managing director, Mousa Hosseinzadeh, whose name and alleged signature appear on the documents, did not respond to requests for comment.
Kilowan testified that Saloojee approached him after learning that Ghorbanoghli had been paid. Saloojee said he needed money to buy a house in Pretoria, Kilowan said.
Kilowan testified that MTN delayed making the payment so he ended up giving Saloojee $200 000 of his own money in April 2007, with a handshake deal that Saloojee would repay him when MTN sent the cash.
It never did. Kilowan, who left MTN in late 2007 and is now a Dubai-based businessman, testified that he continued early last year to try to recoup his money. When MTN turned him down, he said, he decided to co-operate with Turkcell.
He testified he did not stand to benefit from the case’s outcome, other than travel expenses and compensation for time spent on his deposition and “loss of business”. He also said he billed Turkcell an hourly rate for reviewing documents in a separate arbitration case, and had received about $21 800 over the past year. As a result of this disclosure, MTN, which is trying to dismiss Turkcell’s lawsuit in the US, recently called his testimony “paid evidence”.
Meanwhile, MTN Irancell has become Iran’s fastest-growing cellphone operator. MTN recently reported 

Friday, June 15, 2012

SA looks to Nigeria, Angola to replace Iran oil

SA looks to Nigeria, Angola to replace Iran oil

Second Take: IMBS iron-from-waste plant

Second Take: IMBS iron-from-waste plant

South Africa Amoing Walmart's Five Countries Posing The Highest Risk Of Corruption

SA among Walmart’s five countries posing high risk of corruption

Walmart recommends that its employees in “certain countries” make payments to police officers if they feel threatened by the officer’s behaviour.
But the employee must first say that they are prepared to pay “an official a recorded fine” if the law has been broken and ask for a ticket or receipt. However: “If the police officer becomes angry, aggressive or you feel threatened by the police officer’s behaviour, as your health and safety is our priority, you may make the payment.”
This exception to an otherwise strict policy on bribery and corruption is contained in a 14-page statement of ethics, which was updated in February and issued by Walmart’s wholly owned subsidiary, International Produce Limited.
The 14 pages contain detailed procedures, which are intended to “reinforce our stance on bribery and corruption and to help our colleagues and business partners to do the right thing when they are carrying out our business”.
In what is understood to possibly be a reference to South Africa and maybe China, Brazil, Mexico and India, the code notes: “Police in certain countries stop our colleagues, mainly when driving, and ask for personal payments. In some circumstances our colleagues have been threatened with being locked in a cell if a payment is not made.”
The code recommends that to reduce risk, the “colleagues” should ensure the vehicles are in good working order and properly licensed and they should keep to the speed limit.
Walmart has had difficulty shaking off the topic of corruption since April when the New York Times published damning allegations that the group’s Mexican division had extensively used bribes to speed up its store-opening process.
Earlier this week it emerged, from a letter written by members of a US Congressional committee that has been tasked with investigating the “Mexican bribes”, that Walmart’s legal advisers had identified five countries that posed the greatest risk of corruption. The five first-tier countries are Mexico, China, Brazil, India and South Africa.
The lawyers had been retained in 2011 “to conduct a broad review of your anti-corruption policies and operations in Mexico, Brazil and China”, stated the letter, which was addressed to Walmart’s chief executive Michael Duke. As a result of the review, the lawyers recommended that Walmart also evaluate its operations in India and South Africa.
The committee is investigating to determine whether or not Walmart has contravened the Foreign Corrupt Practices Act (FCPA), which makes it illegal for American companies and individuals to pay bribes in foreign countries.
It is evident from the letter that the committee is frustrated by Walmart’s unwillingness to co-operate with the inquiry. “You have provided us with no documents, you have declined to allow any Walmart employees to brief our staff about the allegations.”
Commenting on the references to South Africa, a Walmart spokesperson told Business Report yesterday that Massmart “has always maintained a robust risk control environment… within the King 3 governance framework.”
The spokesperson said since the merger’s implementation last June, a review of Massmart’s internal controls had been initiated to ensure they were compliant with the FCPA.
Letter to Wal-Mart Stores chief executive Michael Duke.
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Angola's Vincente Rejects Corruption Fears

June 14, 2012 3:00 pm

Angola’s Vicente rejects corruption fears

High above the relentless traffic of Luanda, Angola’s capital, the man at the centre of the scramble for Africa’s natural resources is just back from his morning jog.
Manuel Vicente has spent the past decade stewarding an oil industry that now accounts for one in every 50 barrels of world production, forging Angola’s ties with China and building a personal portfolio that includes interests in banking and real estate. During 12 years as head of Sonangol, he transformed the state-owned oil company from the economic engine of the government’s military campaign during three decades of civil war into the continent’s foremost energy group, with assets from Iraq to Cuba and annual revenues of $34bn.


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Mr Vicente graduated to Angola’s political inner sanctum in January when he was appointed minister of state for economic co-ordination – fuelling expectations that he is the chosen successor of José Eduardo dos Santos, the country’s authoritarian ruler since 1979. He swapped his office in Sonangol’s gleaming 23-storey downtown headquarters for the hilltop villas of the acacia-lined presidential enclave.
To the government’s critics, Mr Vicente embodies what Ricardo Soares de Oliveira, an Angola expert at Oxford university, calls “the privatisation of power”. It is a model that fuses personal and state interests in the hands of a small ruling class that brooks little dissent. And it has brought the business interests of Angola’s elite to the attention of US authorities. A corruption investigation has drawn attention to the role of little-known local partners with political connections in multibillion dollar Angolan oil ventures – as well as the role of Mr Vicente himself.
In a rare interview, Mr Vicente says the local partner policy is here to stay. He shrugs off concerns that it could leave US and European companies on the wrong side of anti-corruption laws at home.
“It is their problem, they have to resolve it,” he tells the Financial Times. But he adds: “There is no corruption in that. It’s important that the world understands. The idea is to empower the locals and we’ll keep doing that surely, within the [Angolan] law.”
A genial engineer who studied at London’s Imperial College before joining the oil ministry, Mr Vicente’s leadership of Sonangol earned him a reputation for competence among the energy groups that pump Angola’s 1.8m daily barrels of crude. Total, BP, Chevron, ExxonMobil and others have invested tens of billions of dollars to double Angola’s output. It is a key source of crude for China and the US.
Since November, however, the US Securities and Exchange Commission and the Department of Justice have been formally investigating the Angolan operations of Houston-based Cobalt International Energy.
In February Cobalt, whose biggest shareholder is US investment bank Goldman Sachs, made one of the most promising oil finds of recent years deep under Angolan waters. In April the FT revealed that Mr Vicente and two senior generals had held previously concealed stakes in Nazaki Oil and Gás, Cobalt’s local partner. At the time the venture was launched in 2010, Mr Vicente was running Sonangol, which awarded Cobalt its concession. US anti-corruption laws make it a crime to pay or offer anything of value to foreign officials to win business.
Mr Vicente says he was unaware that his investment company, Grupo Aquattro Internacional, had a stake in Nazaki. Aquattro pulled out of Nazaki after he realised this, he says. Nazaki, which has four other shareholders, did not respond to questions about its ownership.
“We are serious people,” Mr Vicente says. “We know very well our job and we know very well our responsibility. And we’ve never worked against the law.”
The minister concedes that, had he known about it, his indirect stake in Nazaki would have represented “a conflict of interests” with his leadership of Sonangol.
Michael Goldberg, a lawyer with Baker Botts representing Cobalt, says the company has spoken with Mr Vicente since the FT’s revelations. The details of that conversation will be passed to the US agencies investigating the matter, he adds. “Based on our investigation into this entire matter, including our most recent findings, we are more convinced than ever that Cobalt has not violated any US or Angolan laws,” Mr Goldberg says.
The SEC declined to comment on the progress of its investigation.
The government is really serious, engaged in combating poverty. I’m a Christian guy. It doesn’t work if you are OK and the people around have nothing to eat. You don’t feel comfortable - Manuel Vicente, Angolan minister for economic co-ordination
With the US and European Union separately preparing rules that would oblige companies to disclose details of tax payments to governments, Angola’s culture of secrecy poses a dilemma for foreign oil groups. “We’re not forbidding people to do that [disclose details],” Mr Vicente says. “What we are telling the people [is]: ‘Let’s do it together.’ ”
Just when the US probe raises delicate questions for western investors, the alliance that Mr Vicente has forged with suitors from the east appears to be growing only stronger. Mr Vicente is a chief architect of a network that melds state and private interests from Angola and China into what analysts describe as the emerging force in the race for Africa’s rich stocks of crude, metals and minerals.
Until recently Mr Vicente chaired China Sonangol, a Singapore-based joint venture between Sonangol and a band of private Hong Kong investors known as the 88 Queensway group. The 88 Queensway group owns China International Fund, which spearheads Angola’s vast infrastructure programmes. The terms of CIF’s contracts with the Angolan state are not publicly known. Mr Vicente has played a role in CIF’s expansion, helping it secure its multibillion dollar minerals and infrastructure deal in 2009 with the repressive junta that ruled Guinea at the time. Mr Vicente says the CIF is “completely separate” from Angola’s $10bn oil-for-infrastructure programme with the Chinese state.
China Sonangol, alone or in partnership with China’s state-owned oil group Sinopec, has amassed Angolan oil interests. Most recently, it was granted minority stakes in two new oil exploration blocks awarded to Cobalt and BP in December, according to company announcements. The venture’s position outside Sonangol means that it is subject to even less scrutiny than the opaque state oil group.
For all the clamour from foreign investors seeking a slice of Angola’s oil wealth, the UN estimates that more than a quarter of the country’s 18m people still live in extreme poverty, a decade after the civil war ended. Mr Vicente acknowledges what observers see as the most troubling development of Angola’s postwar years: the widening gulf between a super-rich elite and the rest.
“The government is really serious, engaged in combating poverty,” he says. “I’m a Christian guy. It doesn’t work if you are OK and the people around have nothing to eat. You don’t feel comfortable.”
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Thursday, June 14, 2012

Sub-Saharan Africa economic growth remains robust – World Bank

Sub-Saharan Africa economic growth remains robust – World Bank

SABC Fire Damage Will Cost Millions

‘SABC fire damage will cost millions’

ST SABC fire 04 (26146020) (26146873)
Firefighters at the scene of a fire at SABC's studioes. Photo: Antoine de Ras
A fire which broke out at the SA Broadcasting Corporation's (SABC) studios would not interrupt popular soap operas, the public broadcaster said on Thursday.
Acting chief operations officer Hlaudi Motsoeneng said interim measures were in place to ensure production of “Generations”, “Muvhango” and “Isidingo” would continue.
“We have five studios that are used to produce drama and only one of them has burned down,” he said in a statement.
The soap operas were also recorded a few months before they were aired on television.
“This means production will continue and the public need not panic thinking the production of their favourite soapies might be affected.”
He said it would take a few months for operations to return to normal but the SABC was confident it could maintain full production.
“The estimated value of the damage is around millions of rands - our investigating team will be able to determine the exact value once they finalise their investigations.”
No one was injured in the fire.
The cause of the blaze was not immediately known and an investigation into this was underway, Motsoeneng said.
Earlier, Johannesburg emergency services spokesman Niel Rooi said the fire broke out around 8pm on Wednesday.
Motsoeneng told Morning Live: “As the SABC we are very shocked. As you know financially we are not sound.
“This is something that we don't know how to handle but we will get there.” - Sapa
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US Exempts South Africa From Iran Oil Sanctions

US exempts SA from oil sanctions

An Iranian worker rests in front of a huge portrait of Iran's Supreme Leader Ayatollah Ali Khamenei on a wall near a university during Friday prayers in Tehran February 24, 2012.
South Africa cut back enough on its Iranian oil imports this year to get a six-month reprieve from US sanctions this week. But it will have to cut back a lot more on its imports over these six months to avoid the US sanctions kicking in next year.
The Department of Energy confirmed yesterday that the US had given South Africa a 180-day exception to the sanctions on banks and other financial institutions that are due to start at the end of this month.
The sanctions would have barred any South African bank or other financial institutions that continued to do oil business with Iran from the entire US financial system.
The department said the 180-day exception to the US sanctions was “potentially renewable, provided there has been a significant reduction of the crude oil from Iran during the period of the exception”.
US Secretary of State Hillary Clinton had said in a statement on Tuesday that South Africa was one of seven countries that had been exempted from the sanctions because the nation had “significantly reduced” imports of Iranian oil this year.
Brian Denver, the spokesman for the US embassy in Pretoria, said yesterday that Clinton “has made the determination that South Africa has significantly reduced its volume of purchases of Iranian crude oil, and its importers intend to continue to reduce the volume of purchases of Iranian crude oil”.
Industry sources said that the import cuts over the next six months would probably be more difficult as the overall reductions so far had been greatly helped by those oil companies, like Sasol, that had decided to stop Iranian oil imports completely.
Over the next six months the remaining oil companies that depend more than others on Iranian oil, will probably struggle to reduce their dependency. Some have refineries that are technically adapted for Iranian oil.
They are likely to incur extra costs in altering their refineries while all companies are expected to pay more for oil from other sources as Iranian oil is selling at a discount precisely because of the sanctions.
However, industry sources said the general drop in the oil price had helped local oil firms deal with the effects of the US sanctions.
Oil prices fell for a fourth day in New York after Clinton’s announcement on speculation that the US exemptions will limit the risk of global supply disruptions.
Denver said: “We have seen that sanctions on Iran’s central bank and oil sector are having an effect. According to the International Energy Agency, Iran’s crude oil exports in 2011 were about 2.5 million barrels a day, and have dropped to roughly 1.2 million to 1.8 million barrels a day.
“We will also continue to monitor closely developments in the oil market, including supply, demand, inventories, and spare capacity, to assure that the market can continue to accommodate a reduction in purchases from Iran.”
Neither the South African nor the US governments would say yesterday to what extent local imports of Iranian oil had dropped this year or by exactly how much South Africa was expected to cut them over the next months.
Deputy President Kgalema Motlanthe merely told Parliament that South Africa would cut its oil imports from Iran to “acceptable levels” to comply with the sanctions.
International Relations and Co-operation Minister Maite Nkoana-Mashabane recently stated that even before the Iranian oil sanctions came in, South Africa had been engaged in a strategy of diversifying its oil sources away from the Middle East, towards Africa.
The Energy Department said the EU sanctions against Iran due to kick in on July 1 still remained a hurdle. It said the problem was that the EU had banned its insurers from insuring or reinsuring Iranian oil cargoes, which “will make it impossible for importation of crude oil from Iran”.
The government would “continue to engage with the EU about its sanctions”, the department said. 

Sir Stelios outlines Africa airline plans -

Sir Stelios outlines Africa airline plans -

Wednesday, June 13, 2012

India offers $1bn incentive for African infrastructure investment

India offers $1bn incentive for African infrastructure investment:

'via Blog this'

Niger Leader Urges Action On Mali

June 12, 2012 4:43 pm

Niger leader urges action on Mali

Mahamadou Niger Prime Minister©Shaun Curry
'This threat is not merely a concern for the Sahel but for the entire world,' Mahamadou Issoufou said
An alliance of Islamist insurgents, al-Qaeda militants, mercenaries and drug gangs threatens to turn swaths of west Africa into a new Afghanistan after it seized control of northern Mali, the president of neighbouring Niger has warned.
Mahamadou Issoufou called on the UN to mandate west Africa’s regional bloc to use military force in Mali, should mediation efforts fail to quell a crisis that has cast a long shadow over the fragile nations of the Sahel region fringing the Sahara.


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“This threat is not merely a concern for the Sahel but for the entire world,” Mr Issoufou told the Financial Times in an interview.
Mr Issoufou has won plaudits internationally since his victory a year ago in polls that marked a return to democracy after the 2010 coup that ended the authoritarian Mamadou Tandja’s decade in power, overseeing what he forecasts will be economic growth of 15 per cent this year.
The IMF forecasts growth of 13.4 per cent this year. But his strategy to transform the fortunes of one of the world’s poorest nations has been complicated by the unrest in Mali.
Malian troops who took power in a March coup before standing aside under regional pressure have failed to contain the northern insurrection by Tuareg separatists and Islamist insurgents with ties to al-Qaeda in the Islamic Maghreb (AQIM).
“If AQIM establish a territory in Mali, they will try to claim territory across the whole of west Africa and they will try to reach into Europe,” said Mr Issoufou. “It is the ‘Afghanisation’ of the Sahel.”
While Niger has so far avoided a resurgence of armed separatism among northern Niger’s Tuaregs, their Malian cousins, backed by mercenaries who returned from Libya after the fall of Col Muammer Gaddafi, declared an independent state, only to be outmuscled by jihadists.
Mr Issoufou said Afghan and Pakistani militants were training Malian jihadists, who had been joined by fighters from Boko Haram, the Islamist group that is staging a bloody campaign of bombings and gun attacks in Nigeria.
The rebels had found common cause with the formidable drug gangs that move South American cocaine through west Africa to Europe, Mr Issoufou added, and established ties with Somalia’s al Shabaab Islamists.
If AQIM establish a territory in Mali, they will try to claim territory across the whole of west Africa and they will try to reach into Europe - Mahamadou Issoufou
The African Union plans to seek a UN mandate for armed intervention but the Niger president said force remained the last resort of Ecowas, the 15-member regional bloc. “Perhaps a Security Council resolution authorising an intervention in Mali will facilitate the mediation,” he said.
Even as he warned of the risks of Mali’s crisis spreading discord beyond its borders, he offered an alternative vision of economic integration as an antidote to conflict.
Visiting Paris and London to court investment, Mr Issoufou said talks were under way with potential investors on extending to landlocked Niger the railways that connect the region’s big ports to the interior.
He said the new routes would be needed once a vast new mine at Imouraren more than doubled Niger’s uranium output to 9,000 tonnes a year making it the world’s second-biggest producer of the nuclear fuel, behind Kazakhstan.
The president said that François Hollande, his French counterpart, had assured him that the mine, operated by French nuclear group Areva, would come into production in 2014 as planned.
Chinese-led oil production, which began in November, was expected to reach 500,000 b/d over the next five years, placing Niger among the continent’s mid-ranking producers, Mr Issoufou added.
Oil and uranium will account for much of the 15 per cent growth Niger expects. But the president is also seeking a remedy to the region’s other affliction: a dependency on natural resource exports that stifles the broader economy and foments instability.
“We are in the process of breaking that [dependency],” Mr Issoufou said. His $12bn investment programme over five years is designed to build infrastructure, promote education and support his flagship project: to use irrigation and farming technology to bolster agriculture in an arid country of 16m people perennially stalked by famine.
“In Great Britain, France, Europe, development happened through agricultural surpluses that allowed the financing of industry,” Mr Issoufou said. “We are going to do that in reverse: it is with revenues from the mining industry that we will finance agriculture.”